CHINA AUTO CORPORATION LTD. (Company Registration No E) SALE OF MILLION SHARES IN CREATIVE MASTER BERMUDA LIMITED

Transcription

1 CHINA AUTO CORPORATION LTD. (Company Registration No E) SALE OF MILLION SHARES IN CREATIVE MASTER BERMUDA LIMITED 1. INTRODUCTION China Auto Corporation Ltd. (the "Company") wishes to announce that it has today through its subsidiary companies, Acma Strategic Holdings Limited ("ASHL") and Acma Investments Pte Ltd ("AIPL"), sold million and 0.87 million shares ( Share ) respectively in the issued and paid up capital of its associated company, Creative Master Bermuda Limited ( CMBL ), at a price of S$0.08 per share and gross consideration of S$5,175,760. Prior to the Share, the Company and its subsidiaries (the "Group") held approximately 25.3% of the issued share capital of CMBL. The Group shall cease to have any beneficial shareholding interest in CMBL with effect from 31 December 2009 following the Share. A brief summary of each share sale carried out by ASHL and AIPL is set out below: (a) (b) ASHL and AIPL has placed out in the market today 5.827million and 870,000 shares in CMBL respectively at S$0.08 per share for sale consideration of S$466,160 and S$69,600 respectively. ASHL has entered into three sale and purchase agreements today in respect of the sale of an aggregate 58 million shares in CMBL by ASHL by way of off-market transactions, details of which are set out below: (i) with Tronic International Pte Ltd ("TIPL") pursuant to which ASHL agrees to sell 40 million shares in CMBL to TIPL in consideration of S$3,200,000. (A) completion of the sale and purchase of 8,000,000 and TIPL may mutually agree in writing which shall not (B) completion of the sale and purchase of 32,000,000 such other date as ASHL and TIPL may mutually agree

2 (ii) with Hung Hsi-Kun ("HHK") pursuant to which ASHL agrees to sell 10 million shares in CMBL to HHK in consideration of S$800,000. (A) completion of the sale and purchase of 2,000,000 and HHK may mutually agree in writing which shall not (B) completion of the sale and purchase of 8,000,000 such other date as ASHL and HHK may mutually agree (iii) with Chan Chong Beng ("CCB") pursuant to which ASHL agrees to sell 8 million shares in CMBL to CCB in consideration of S$640,000. (A) completion of the sale and purchase of 1,600,000 and CCB may mutually agree in writing which shall not (B) completion of the sale and purchase of 6,400,000 such other date as ASHL and CCB may mutually agree Pursuant to the signing of the sale and purchase agreements today, completion in respect of the sale and purchase of an aggregate of 11.6 million shares has taken place today. Copies of the sale and purchase agreements are available for inspection during normal business hours at the registered office of the Company for 3 months from the date of this announcement. 2. RATIONALE AND BENEFITS OF THE SHARE SALE The Group has previously indicated its strategic shift on expanding its automotive tooling and plastic injection molding businesses. The Share will enable the Group to divest its shareholding interest in CMBL which is principally involved in the manufacture of die-cast collectibles and related moulds. CMBL, which is listed on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST"), had incurred losses in FY2007, FY2008 and H1 FY2009.

3 The sale price of S$0.08 per share is also attractive compared to the current carrying cost per share of the Group. The aggregate carrying value of the Group s investment in CMBL is S$2.0 million and the Group will book a net gain of approximately S$3.0 million from the disposal. The disposal will also enable the Group to convert to cash a non-income generating asset of the Group thus improving the working capital position of the Group. The Group intends to deploy the proceeds from the Share for the working capital requirements of the Group s core automotive tooling and plastic injection moulding businesses. 3. RELATIVE FIGURES COMPUTED PURSUANT TO RULE 1006 OF THE LISTING MANUAL The relative figures for the Share computed on the bases set out in Rules 1006(a) to (d) of the Listing Manual of the SGX-ST ( Rule 1006 ) and based on the audited financial statements of the Group for the year ended 31 December 2008 are as follows: (a) Net asset value of the assets disposed of, compared with the Group s net asset value 1.7% (b) Pre tax profits attributable to the assets disposed of, compared with the Group s net profits for FY2008 (c) Aggregate value of the consideration received, compared with the CAC s market capitalization based on the total number of issued shares excluding treasury shares as at 30 December 2009 (d) The number of equity securities issued by the Company as consideration for an acquisition, compared with the number of equity securities previously in issue 18.1% 2.5% Not applicable As the relative figure for the Share computed on the bases set out in Rule 1006(b) and based on the audited financial statements of the Group for the year ended 31 December 2008 exceeds 5% but less than 20%, the Share is a discloseable transaction under Chapter 10 of the Listing Manual. 4. FINANCIAL EFFECTS 4.1 The pro forma financial effects of the Share on the net asset value per share ( NAV ), gearing and earnings per share ( EPS ) of the Company and its subsidiaries and associated companies ( the CAC Group ) are for illustrative purposes only and do not represent the actual financial position and/or results of the CAC Group. 4.2 The pro forma financial effects are based on, inter alia: (a) the financial statements of the CAC Group for the financial year ended 31 December 2008;

4 (b) the Share had been completed on 31 December 2008 for the purpose of computing the pro forma financial effects on the NAV of the CAC Group; (c) the Share had been completed on 1 January 2008 for the purpose of computing the pro forma financial effects on the EPS of the CAC Group; and (d) the number of issued shares of the Company as at 31 December NAV The pro forma financial effects of the Share on the NAV of the CAC Group as at 31 December 2008 are as follows: NAV (S$ 000) 113, ,129 Number of shares issued ( 000) 2,479,541 2,479,541 NAV per share (cents) Gearing The pro forma financial effects of the Share on the gearing of the CAC Group on the assumption that the Share was completed on 31 December 2008, are as follows: Total borrowings (S$ 000) 6,321 6,321 Shareholders funds (S$ 000) 113, ,129 Gearing (times) EPS The pro forma financial effects of the Share on the EPS of the CAC Group on the assumption that the Share was completed on 1 January 2008 are as follows: Net loss of the Group (S$ 000) (15,196) (9,095) Number of issued shares of the Company ( 000) 2,479,541 2,479,541 EPS (cents): Loss (0.6) (0.4) 5. INTEREST OF DIRECTORS AND CONTROLLING SHAREHOLDERS None of the directors or controlling shareholders of the Company have any interest, whether direct or indirect, in the above transactions.

5 By Order of the Board Chou Kong Seng Chief Financial Officer China Auto Corporation Ltd 31 December 2009